Determinant Factors Of Indonesia's Import From China And Its Impacts On The Indonesia's Economy

This study intends to investigate the determinant factors of Indonesia's import from China.Furthermore,to support the investigation,this also will use several factors of international trade that deal with import from a Country.These factors include Gross Domestic Product(GDP),Rupiah exchange rates against Chinese Yuan,Total Indonesia's Import,Indonesia's Foreign Exchange Reserves,Indonesia's Foreign Direct Investment from China,Interest Rate,Total Indonesia's Foreign Direct Investment,Indonesia's Balance of Payments,Total Indonesia's Export,and Indonesia's Trades Balance with China.This study used quarterly data sample in Indonesia,from 1999 to 2017.Furthermore,the secondary data was from the Bank of Indonesia,BPS(Statistics Centre Bureau),BKPM(Capital Investment Coordinating Board),and the Ministry of Trade from 1999 to 2017.Furthermore,data was processed by Vector Error Correction Model(VECM)by using STA TA program.The results of the study revealed that in short term analysis,the GDP has a significant positive effect on IFC.Hence,it gives a prove that GDP is a correct indicator to track economic growth of a country.In the same time,in long term analysis finding,GDP has a significant positive effect on IFC,while it has negative effect on GDP.However,both always increase year over year.Hence,there are two possibility factors:(1)Indonesia''s economic foundat ion.Or(2)IFC provides a sturdy stimulus for the main variable to support GDP.Thus,IFC will provide positive influence on GDP indirectly.Additionally,another findings of long term analysis is that IFC has a positive effect on exchange rate.Meanwhile exchange rate has a negative effect on IFC.On the other hand,IFC always rises while exchange rate tends to decrease.Thus it can be determined that IFC has deep influence on Indonesian economy which mean that Indonesia is a potential market for China.As the findings revealed that exchange rate has negative effect on IFC is presented with the decreased exchange rate and the rise of IFC negative effect.Meanwhile,in long analysis findings,The FER has a significant negative effect on IFC,and the IFC has a significant negative effect on the FER.The FDI has a significant positive effect on IFC,instead the IFC has a significant negative effect on the FDI.The Interest Rate has a significant negative effect on IFC,and the IFC has a significant negative effect on the Interest Rate.The Export has a significant positive effect on IFC,and the IFC has a significant positive effect on the Export Furthermore,the BOTITC has a significant positive effect on IFC,and the IFC has a significant positive effect on the Export The relationship among IFC,Export and BOTITC are very dynamic,because all three of them support each other.If a variable of them increase,then it will be inspiring to other of them.Although in the concept of the balance of trade,exports and imports have some contradictions.But in fact,both have increased together.For further research,it is recommended to conduct the research by joining qualitative studies of the determinant factors and unavailable data.Thus,the studies will be better.Further research is also needed from other fields of science which are allegedly having an influence on the unique character of imports(IFC).For example in the field of international politics,international relations,sociology,or other fields of science.